Compliance Journal December 2022
Special Focus Wisconsin Updates its Limited Partnership and Limited Liability Company Laws Under 2021 Wisconsin Act 258, Wisconsin’s Uniform Limited Partnership Act (Ch. 179) and the Uniform Limited Liability Company Act (Ch. 183) have been updated to reflect recent revisions to the uniform laws Wisconsin’s existing laws were based upon. The revisions affect the business operations of a limited partnership and limited liability company (LLC) and duties owed amongst partners to a limited partnership and amongst members and managers to an LLC. Revisions also affect the content of filings with the Wisconsin Department of Financial Institutions (WDFI), entity dissolutions, and other business activities. The changes do not have a direct impact on existing, common bank procedures used to establish a deposit or lending relationship or to complete bank customer due diligence (CDD) and customer identification program (CIP) procedures. Existing bank policies and procedures can continue as is further discussed below. Act 258 has a phased-in effective date. The changes made by Act 258 apply to a limited partnership or LLC formed on or after January 1, 2023. The changes also apply on January 1, 2023, to a limited partnership or LLC formed before this date unless the limited partnership or LLC elect to be governed by the existing law applicable before enactment of Act 258. Limited partnerships or LLCs formed before January 1, 2023, also have the option to elect to be governed by Act 258 prior to January 1, 2023. Each limited partnership and LLC in existence at the time of enactment of Act 258 need determine whether to follow existing law or be wrapped into the revised law. To be subject to the revisions made by Act 258, the limited partnership or LLC need do nothing; the new law will automatically apply to the limited partnership and LLC on January 1. Some limited partnerships and LLCs with a more complex and robust partnership agreement or operating agreement may desire to be governed by the old law. If this is the case, the limited partnership or LLC need file a Statement of Nonapplicability with WDFI by December 31, 2022, to remain subject to existing law. If an existing limited partnership or LLC sought to be subject to the new law prior to the January effective date, the entity would have filed a Statement of Applicability with WDFI. The following is a summary of law changes regarding limited partnerships and LLCs as a result of Act 258. Limited Partnership Background Wisconsin first adopted its Uniform Limited Partnership Act in 1919. The law was revised in 1983 to adopt the Revised Uniform Limited Partnership Act, with modifications, and then again in 1985. Act 258 repeals and recreates Wisconsin’s limited partnership law to adopt the Revised Uniform Limited Partnership Act (2021), as last amended in 2013, with modifications.